Listen to the full discussion here:
Alex Capri is a Senior Fellow and Lecturer at the National University of Singapore Business School and Lecturer at Lee Kuan Yew School of Public Policy.
Alex was a former Partner and Regional Leader of KPMG’s International Trade & Customs practice in Asia Pacific
He has over 20 years of experience in value chains, logistics and global trade management, both as an academic and a professional consultant. He has advised many of the world’s best known companies on cross‐border projects in more than 40 countries.
He also writes for a variety of publications including Forbes Asia and The Nikkei Asian Review and is a frequent guest on global television and radio networks, including BBC International, Bloomberg, CNBC and Channel News Asia.
Connect with the Guests:
Alex Capri: Linkedin
Some of the highlights from the podcast:
- The impact of Coronavirus on trade and global supply chain
- Phase One trade deal China/US – does it solve anything?
- Semiconductors – the next war zone and how it links to Huawei
- The Galapagos effect
- The literal fight for techno talents
- How effective is glocalization for global companies
- [01:28] How did you end up spending 40 years in global trade consulting?
- [03:14] How do you see the Coronavirus impacting trade and global supply chains?
- [04:27] There clearly is and will be a financial impact not only on supply chains, but also financial markets, local economies, and etcetera.
- [06:05] Tell us a little bit about your views regarding the Phase One trade deal between China and the US.
- [07:14] The issue for this decade regarding the US and China’s relationship is that it is a systemic power rivalry which is much more extensive than just trade and tariffs.
- [08:25] Do you have some examples regarding the rise of techno nationalists, industrial policies?
- [09:03] If you look at China, because of their policy, they’ve been able to attract topflight talent and intellectual property and investment and absorbed that. They’ve been able to go abroad and acquire that technology.
- [11:21] The United States, the Trump Administration reaching out to Ericsson and Nokia and actually offering to subsidize them, to be able to fund their activities so that they can compete on price level with Huawei.
- [12:34] What do you think China will do as sustained efforts to move away from a dependency on the American technology and in the American supply chain driven semicon and microchips?
- [15:17] The Chinese could be a decade plus away from being able to produce critical semiconductor technology depending on how quickly the state of the art advances and the leaders were able to advance that.
- [15:36] You mentioned a very interesting point about the Galapagos syndrome and about ring fencing companies in your report, maybe tell us a little bit about that in the context of what we just discussed.
- [17:55] We could see the Galapagos syndrome playing out around the world in the tech sector as you get the techno nationalist pressures forcing different standards.
- [19:08] I think there were a couple of tried acquisitions by the Chinese government into some companies to acquire some of the side B. Maybe let’s go a little bit deeper on that as well.
- [20:43] Chinese companies are producing just around or just below 5% of the microchips in the world and they’re not state of the art, basically.
- [23:53] The main market for semiconductors is ultimately China. How do you see things shaping up in the next 5 to 10 years given all this underlying national interests?
- [24:24] The extensive global value chains that have taken essentially 20 to 30 years to develop in the semiconductor space are going to be carved up. We’re going to see those value chains fragment, localize, regionalize under this banner of techno nationalism.
- [25:10] The US Government is putting pressure on TSMC to move operations in the US to serve US clients and at the same time the Chinese Communist Party is putting pressure on TSMC to relocate production into the Chinese mainland.
- [29:32] Companies like Intel have a major business in China and so having that kind of value chain disrupted is absolutely going to create havoc.
- [31:26] China tried to attract and develop scientists, engineers and the like. You were mentioning that pool of brainpower to take them forward. I would. How do you see this shaping up in terms of the future?
- [33:38] We’re also going to see this fracturing the value chains when it comes to human capital. So we’ll have the development of these pools of talent, and there will be competition to get that talent.
- [35:39] From a Chief Supply Chain Officer perspective, with all these trade discussions and tensions between the superpowers? What type of advice would you give to them? What should they be thinking about? How can they be preparing?
- [36:58] Companies need to become more adept at becoming effective global players by going local.
- [38:52] When you manufacture something abroad that has US technology in it, if it exceeds the 25% level or the 10% level depending on what it is, it’s going to require a license, depending on who you send it to who the buyer is.
- [40:04] How do you mitigate as a company? Well, what you do is you try to get below those de minimis levels so that there is no longer a license required.
- [41:25] Would you have an example of some case studies of companies that you’ve seen in recent period that have done this fairly well, moving or adopting to this glocal type of mindset?
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